Table Of Content

, COX ~3'SI7'-0 . THE JOURNAL OF THE DEFENSE ACQUISITION AL UNIVERSITY ION G REFORM: 189 * *ACQUISITION It's Not as Easy as It Seems SOME LONG-TERM ISSUES AND 199 IMPEDIMENTS AFFECTING MILITARY *(cid:1) * ' SYSTEMS ACQUISITION REFORM TE(NOOG APPROACH: 213 DoD versus Boeing, A Comparative Study ICOOPERATIVE ACQUISITION 231 PROJECTS INT HE PACIFIC RIM WHAT EVERY GOVERNMENT 247 EMPLOYEE SHOULD KNOW ABOUT POST-FEDERAL EMPLOYMENT RE STR ICTIO NS hIBU1OtION i .A. r 19950927 104 'kjSITI(." Thomas J. Crean President, Defense Acquisition University Board of Review Dr. Henry S. Bausum Adm. James Hogg, USN (Ret.) The Journal of Military History National Security IndustrialA ssociation Walter B, Bergmann Frank Kendall Acting Deputy Assistant Secretary of Director of Tactical Systems* Defense for Production Resources* Martin Meth Brig. Gen. Claude M. Bolton, Jr., USAF Director,W eapon Support Improvement Defense Systems Management College Group* John A. Burt Dr. Diane R. Murphy Director, Test and Evaluation* ProcurementA utomation Institute Peter DeMayo William H. Reed Martin-MariettaC orporation Defense ContractA udit Agency Blair Ewing Eleanor Spector Office of the Department of Defense Director,D efense Procurement* Comptroller Prof. Richard A. Stubbing Dr. J. Ronald Fox Duke University HarvardU niversity Kathryn C. Turner Dr. Jacques S. Gansler Standard Technology, Inc. TASC Office of the Under Secretary of Defense (Acquisition and Technology) Editorial Board Dr. David Morgan Frank Sobieszczyk Army Logistics Management College Defense Acquisition University Dr. Richard Murphy Dr. Stephen Versace Air Force Institute of Technology Information Resources Management College Dr. James Price Dr. Rita Wells Defense Systems Management College Industrial College of the Armed Forces Lt. Col. Keith Snider Naval PostgraduateS chool James Kurt Wittmeyer Editor Gregory T. Caruth Norene Blanch Managing Editor Editorial Assistant Bartlett Communications Layout and Design The Acquisition Review Quarterly is published quarterly for the Defense Acquisition University by the Defense Systems Management College Press, 9820 Belvoir Road, Suite G38, Fort Belvoir, VA 22060-5565. Second Class Postage rate pending at Fort Belvoir, VA and at additional entry offices. Postmaster send changes of address to: Editor, Acquisition Review Quarterly,D efense Acquisition University, 2001 N. Beauregard St., Rm 420, Alexandria, VA 22311-9913. To subscribe, government personnel should submit written requests to the above address. Non-government personnel and organizations may subscribe at $12 annually through the U.S. Government Printing Office, Washington, D.C. 20402. Articles represent the views of the authors and do not necessarily reflect the opinion of the Defense Acquisition University or the Department of Defense. o-nA;cliovced 03 N.0 7,940 18 Sumr 95 Refereed Jou rnal Acquisition Review Quarterly (ARQ) Vol 115 No. 3 Numerous Authors 'A INI-D,6 , A DRE1 SS( a'G OR ANIZATIO Defense Systems Management College P?" 2Ti NVIP,.Z2 ATTN: DSMC Press 9820 Belvoir Road Suite G38 Fort Belvoir, VA 22060-5565 ~~ .. Defense Acqusition University 2001 No. Beauregard Street Alexandria, VA 22311 ~ O~O~/ V R.NUTY STA TEMEUT 7L.s _ ti -il~OE Distribution Unlimited A"a*SrFR;v'.CI 200 LvorwJ The primary goal of the Acquisition Review Quarterly (ARQ) is to provide practicing acquisition professionals with relevant management tools and information based on recent advances in policy, management theory, and research. The ARQ addresses the needs of professionals across the full specturm of defense acquisition, and is intended to serve as a mechanism for fostering and disseminating scholarly research~ on acquisition issues, for exchanging opinions, for communicating policy decisions, anda ionra inng hih level of awareness regarding acquisition management philosophies. tJ5I(T TRMS15. ý!UMEORF PAGES Acquisition Reform; Technology Approach; Cooperative 82 Acquisition; Post-Federal Employment Restrictions; Military ~I5PR ý C -- SsesAcquisition Reform zERCi FUT CL A C C.~AT 01 N! 31. SE C U R iY C.L A52SS !S,'~Cl Ai 3 C ~;sI~ .0 : LID FASRC OFR EO0a2I OF THREPEA GE OFAaS C Unclassified Unclassified Unclassi fied Unlimited '402\ /540-01-280-5500 Stan'd.ardFom28(e 2-9 ACQUISITION Vol. II, No. 3 TABLE OF CONTENTS OPINION 189- ACQUISITION REFORM: IT'S NOT AS EASY AS IT SEEMS Mark Cancian The current acquisition system is a trade-off among many competing and often contradictory goals. This article explores the various objectives the system is designed to achieve, the priorities of different players, the trade-offs among the priorities, and the prospects of future reform. RESEARCH 199- SOME LONG-TERM ISSUES AND IMPEDIMENTS AFFECTING MILITARY SYSTEMS ACQUISITION REFORM Edmund N. Conrow, Ph.D. Several approaches have been tried to improve the predictability and control of military systems acquisition, yet costs grow and schedules slip while performance is close to that specified. Cost and schedule growth are generally associated with different government and contractor objectives. An analytical model was created to mirror the military systems acquisition process consistent with statistical results from a broad sample of military programs spanning the 1950s through 1980s. 213 - TECHNOLOGY APPROACH: DOD VERSUS BOEING, A COMPARATIVE STUDY A. Lee Battershell This is an analysis of different approaches to the use of technology by Boeing and DoD to determine how they may have affected development time for the C-17 and the Boeing 777. Boeing's focus on schedule, performance, cost, and market competition is contrasted to DoD's focus on performance. This paper concludes that the mere existence of a technology should not obscure: a) the impact its maturity may have on program cost and risk, b) whether it will meet a real need of the user, and c) whether the added development time it may require could pose unanticipated problems for the customer. DTIC QUALITY INSP2 CTED 5 231- COOPERATIVE ACQUISITION PROJECTS IN THE PACIFIC RIM Richard Kwatnoski This is the third of three related research studies of cooperative acquisition projects conducted by DSMC. It describes the current reality of cooperative projects in the Pacific Rim, identifies barriers to and facilitators of cooperation, and examines similarities and differences between PACRIM and NATO-Europe projects. TUTORIAL 247- WHAT EVERY GOVERNMENT EMPLOYEE SHOULD KNOW ABOUT POST- FEDERAL EMPLOYMENT RESTRICTIONS Timothy Dakin This paper discusses the three principal, yet conflicting, laws concerning post-federal employment restrictions on government employees at present, especially for those employees involved in the acquisition process. NTIS CRA&M DTIC TAB Unannounced El Justi-fication ..... By ----------- I Distribution Availability Codes Avail and /or Dist Special ACQUISITION REFORM: IT'S NOT AS EASY AS IT SEEMS Mark Cancan The current acquisition system represents trade-offs among many competing and often contradictory goals. This article explores the various objectives the system is designed to achieve, the priorities of different players, the trade-offs among the priorities, and the prospects of future reform. he acquisition system is broken and Reinforcing this impression of waste and needs to be fixed. How many times inefficiency are the continuous public ef- have officials said this? From the Sec- forts at reform. Over the years commission retary of Defense, who pledged during his after commission has called for reform confirmation hearings to "institute innova- (Packard Commission, 1986; et al.). If the tive management techniques to vigorously problem is so clear, then why is improve- foster acquisition reform" (U.S. Senate, ment so hard? 1994), to the head of the American Defense The usual answer is that "special inter- Preparedness Association, who called for ests" and "obstructionist bureaucrats" are "[acquisition reform that is] so desperately preventing progress. After all, who else needed by the defense industrial base" would defend an obviously broken system? (Skibbie, 1993), DoD officials, industry ex- Conscientious, public-spirited people want ecutives, outside experts, and academics change, while selfish, short-sighted people voice the same complaint, want to maintain the current corrupt, inef- This opinion is also shared by the public ficient system. atlarge. When asked how much waste, fraud, This depiction shows why so little and abuse there is in the defense budget, 68 progress has been made. In fact, the current percent in one poll answered "a lot" and an- system is not broken. It is well designed to other 28 percent answered "some." In an- accomplish the goals that the nation values. other poll Americans believed by an 87 per- But how can this be when so many people cent to 10 percent margin that "there is too are critical of the system? The reason is much waste in defense spending" (Americans simple: different players have different Talk, etc., 1988; Harris, 1985). goals and priorities. The current system rep- 189 Acquisition Review Quarterly - Summer 1995 resents trade-offs among many competing, finally looks at future reform prospects. often contradictory goals and, not surpris- ingly, works imperfectly as a result. 'Acqui- sition reform" is not a matter of fixing a sys- WHY IS DEFENSE DIFFERENT? tem that is broken. For each player it is a matter of wanting to redesign the system to Before going further it is worthwhile re- favor what they value, minding ourselves why this problem is so That these trade-offs exist is no secret. hard. Yes, we all know that the defense in- Both Perry and Colleen Preston, the Assis- dustry is different. However, reviewing the tant Deputy Under Secretary of Defense for reasons why this is so will put the discus- Acquisition Reform, have indicated this. sion about reform into perspective and re- For instance, Perry has stated: "My opinion mind us of how different the defense indus- is that the level of management control is try actually is from commercial industry probably appropriate for the acquisition sys- (Fox, 1974): tem we have. Therefore, we're going to have to change the system in a fundamental way." 1. There is one buyer-a monopsony-and Unfortunately, the demands of public hence no true market; rhetoric today push the discussion towards fixing the system rather than making trade- 2. For any particular item, there is often offs. Trade-offs mean that one must give only one or at most a very few sellers; something up to gain something of greater value, but public discussions today do not 3. The user's "bottom line" is not financial allow for talk of sacrifice. Hence, there is but performance. Competition therefore an inclination to characterize the problem strongly emphasizes performance over as if the nation could get something for price; nothing, thereby fixing the problem. These two approaches collide when an actual re- 4. Major contracts are signed years before form package has to be proposed. Because actual results are available and therefore any reform must, in effect, be a trade-off, must be based on estimates of cost, the losers cry foul and oppose the package. schedule, and performance; This is what happened with the most recent administration package. 5. Performance is difficult to judge, and is This article explores why something that often judged subjectively, except for the virtually everyone professes to want, acqui- rare occasions when the nation actually sition reform, is so hard to actually attain, uses military force on a large scale; The article discusses the different objectives that the acquisition system is designed to 6. The enterprise operates with public achieve, the priorities of the different play- funds, the use of which is held to a dif- ers, the trade-offs among the priorities, and ferent standard than private funds; When writing this article, Mr. Cancian was a professional staff member in the Office of the Under Secretary of Defense for Acquisition and Technology. Currently he is the Director of the Land Forces Division, Program Analysis and Evaluation, Office of the Secretary of Defense. He is a certified member of the Acquisition Workforce in Program Management. He is also a Colonel in the Marine Corps Reserve. 190 Acquisition Reform Not As Easy As It Seems 7. Decisionmaking power is diffuse, being the means to intervene to correct them; shared between the executive branch and the legislative branch (with its many 6. Jointness and Interoperability:A ble to be committees and subcommittees); and, used by more than one service and to interact with the equipment of other ser- 8. Decisions and operations are conducted vices; in the open, under great public scrutiny. 7. Industrial Base: Ensuring that the de- J. Ronald Fox, in his classic study of defense industry stays in business and can fense acquisition, concluded from these produce needed equipment in the future; characteristics, that "There is no sensible reason to deny the obvious... The basic te- 8. Fairness and Propriety: Treating all par- nets of the free enterprise system do not ticipants properly. Because this is a pub- apply" (Fox, 1974, p. 474). As a result many, lic, very open process, all decisions and perhaps most, business practices common procedures in commercial industry for evaluating and must be justi- Because this is a public, controlling operations have no application fied, not only very open process, all in the defense world. There are few objec- to the few in- edcisions and proce tive criteria by which to judge defense ac- volved, but to cdures must be justi- tivities and outcomes. Mostly these judg- the public and flied... ments are subjective, based on professional its represen- knowledge and experience that can be radi- tatives. This goes beyond legality to in- cally different for different people. clude propriety. Seemingly arbitrary de- So what are the competing goals that the cisions that may be acceptable in a pri- system is trying to accomplish? The num- vate context are not acceptable for a ber of items could be virtually infinite, but public enterprise; and, the list below is a good start: 9. Socioeconomic: Advancing certain na- 1. Performance (faster, higher, farther): tional goals such as encouraging small There is always pressure to push the en- businesses, promoting minority- and velop of technology. Sometimes this is women-owned businesses, strengthening in response to a particular threat. At unions, and buying U.S. products. These other times it is a more general desire goals are often regarded as illegitimate to gain a battlefield advantage against by people inside the system because they potential opponents; have no direct bearing on national security or on acquisition. Indeed, they look 2. Cost Minimizing: Obviously, the less like the workings of powerful special in- something costs, the more you can buy; terests trying to bend society's rules in their favor. However, democracy is a 3. Schedule: Anything worth having is messy form of government. One person's worth having immediately; selfish special interest is another's vital national priority. Furthermore, every na- 4. Risk: Minimizing the possibility that tional process inevitably gets involved something goes wrong; with these kinds of national policies. Consider, for instance, the tax system 5. Control: Allowing senior officials ad- and its many special provisions that have equate warning of possible problems and no bearing on revenue generation. 191 Acquisition Review Quarterly - Summer 1995 Of course, all the players in the acquisi- programs have signed a contract, either ex- tion process care about all these goals. How- plicitly in the Defense Acquisition Board ever, they do not care about the goals (DAB) Acquisition Decision Memorandum equally. At the risk of caricaturing some of (ADM) or implicitly in various program and the players, here is an analysis of what the budget decisions. OSD expects to see these major players value most: contracts carried out and works to minimize risk of deviation. Second, OSD cares about The Defense Industry: Industry exists to the affordability of the overall defense pro- make a profit. In public debate this is al- gram. Ultimately all programs must fit most embarrassing to acknowledge but is within the allocated top line, and there are nevertheless true. After profitability indus- always more programs than there are re- try wants to stay in business (usually char- sources. Program cost, therefore, gets close acterized as "maintaining the industrial scrutiny. Finally, jointness, and the base") and wants to have as little interfer- interoperability it implies, offers the pros- ence as possible. The defense industry looks pect of better joint warfighting (of great with envy at its commercial sisters who don't interest to the Joint Staff particularly) and have legions of auditors, inspectors, staff- of common equipment (and therefore lower ers and contract administrators looking over costs). their shoulders. Industry's perspective on acquisition reform is clearly contained in a The Congress: The Congress is moved package put together by a coalition of asso- primarily by its fiduciary responsibilities; ciations. This package focuses entirely on that is, the need to ensure that public mon- government oversight and imposed require- eys are seen to be used in ways consistent ments (Defense Acquisition, etc., 1993). with national purposes. Here the end does not justify the means; the means must stand The ProgramM anager: He wants to field on their own. This concern is often charac- something. He is judged as having a suc- terized by a focus on fraud, waste, and cessful program if, at the end, the troops abuse. This concern is shared by an Ameri- get a new piece of hardware. Cost, sched- can public who strongly distrusts both the ule, and even performance mean nothing if military in its procurement activities and the the hardware is not fielded, defense industry. The result is that many members distrust the department. The Con- The Militay Services and Ultimate Users: gress therefore believes that without explicit The services are tasked with equipping units guidance and close scrutiny the department for use by the combatant commanders-in- will waste money. The Congress also, as a chief and hence are required to represent national proponent of socioeconomic goals, the user's interests. They care above all desires to see these furthered by the acqui- about getting equipment that will give them sition system. a warfighting advantage. Ultimately, this means high performance on a rapid schedule. Cost and everything else are secondary. How DOES THIS AFFECT REFORM? The Office of the Secretary of Defense Because of these differing values acqui- (OSD): Historically, OSD has cared first sition reform is like the tale of the blind men about executing the acquisition contract. and the elephant, where each participant This minimizes risk and ensures control (or characterizes the whole by the part he is at least the illusion of it). All acquisition closest to. For industry, acquisition reform 192 Acquisition Reform Not As Easy As ItS eems is reducing interference; for the Congress, result was a severe blow to naval avia- it is improving safeguards; for yet others, it tion. is reducing risk. As a result all agree that acquisition reform is vital, a must-do for any 2. Dual use technologies and commercial administration, but cannot agree on an ac- off-the-shelf (COTS) technologies are tual set of actions. currently extolled as ways to save money As noted earlier, the essence of any ac- and accelerate the acquisition process. quisition reform is a trade-off among desir- They offer the prospect of using a much able goals. Three high visibility examples larger industrial base and of harnessing here make the point: the vitality and drive of the commercial sector. 1. Black (special access) programs are those that require very high security. The Indeed, for certain kinds of products acquisition system for black programs is where technology is moving rapidly (in- attractive to some because many of the formation processing, for example) com- reviews, analyses, and outside interfer- mercial products give both lower price ence of the traditional system are re- and higher performance. Commercial moved. Black programs trade off con- products, even with their limitations, trol and frequently cost for an acceler- come from processes that are much ated schedule and a much higher accep- more agile than the defense acquisition tance of technical risk. They can have system. tremendous successes. The F-117, for instance, was a black program. It was de- However, in other areas commercial veloped quickly and overcame large products often involve a trade-off. Cost technical problems (e.g., two of the first may be lower, and schedule may be prototypes crashed) that might have ter- faster. However, performance, broadly minated an open program. As a result defined, is also often lower. of these advantages, the acquisition process for black programs is often held up Commercial products are not built to the as a model for the entire acquisition sys- demanding environmental and stress tem. Indeed, there is suspicion that the standards attained by military articles. department has been moving in this di- For example, few commercial products rection because during the 1980s the size are required of black programs grew tremendously, to operate at ...where tehnology is more than merely the progress of tech- temperatures moving rapidly...cm- nology would seem to require. ranging from mercial produts give 40 degrees h lower prce and However, there is a downside to the below zero to higherperformane. black system also, as the A-12 experience 140 degrees showed. Here the lack of visibility into above. But military equipment often the program, the lack of reviews and does need this capability, and users will analysis (among other managerial fail- be disappointed if the equipment does ings) and the compartmentation of in- not have it. For instance, one recently formation allowed serious problems to developed military training system ex- develop and grow. When they became tensively incorporated COTS compo- known, it was more attractive to cancel nents but found that the CRTs cracked the program than to try to save it. The in field handling, that the system 193